The following transactions were incurred by Dutch Fabricators during January, the first month of its fiscal year.
Requirements
1. Record the proper journal entry for each transaction.
a. $ 190,000 of materials were purchased on account.
b. $ 174,000 of materials were used in production; of this amount, $ 152,000 was used on specific jobs. c. Manufacturing labor and salaries for the month totaled $ 225,000. A total of $ 190,000 of manufacturing labor and salaries was traced to specific jobs, while the remainder was indirect labor used in the factory. d. The company recorded $ 20,000 of depreciation on the plant and plant equipment. The company also received a plant utility bill for $ 10,000. e. $ 81,000 of manufacturing overhead was allocated to specific jobs.
2. By the end of January, was manufacturing overhead overallocated or underallocated? By how much?